Green Horizons

Time for timber sales: Recent examples from consulting foresters

TIMBER SALE ONE:
An interesting sale from this spring was in Macon County. A total of 1,293 trees were marked, with a total volume of 162,800 board feet (Doyle). The vast majority was white oak, along with some red oak, post oak, hickory and a few cottonwoods and a walnut.

The estimate was for 6,200 board feet of veneer white oak and 35,400 board feet of stave material. At fair marked value of $45,000 - $50,000. This forester had completed the client's cost basis last year and was able to calculate approximately a $40,000 income tax deduction on sale revenue as timber cost basis depletion.

The bid opening was in early April and 10 bids received ranged from $25,000 and $77,000. The consulting forester's fees were about $4,500, because time and expense is charged instead of commission. Rather than pay the income tax rate on $77,000 (if the client could have gotten that price without professional forestry help), the client will pay a capital gains tax rate on about $32,500.

This forester's client saved more than the forester's rate in taxes, and got a great price for the trees.

TIMBER SALE TWO:
This consulting forester shared two sales in Clinton and DeKalb counties in January and March.

The first sale was on a farm of approximately 900 acres (160 timber) along creeks and 124 walnut trees. Lump sum bids ranged from $17,680 to $52,500. The forester marked an additional 79 walnut trees for additional volume and lumber. The estimated value for these trees was $22,350.

The second sale had 211 walnut trees with 8,961 board feet in lumber. There was also 29,660 board feet in cottonwood, 740 board feet in hackberry, 2,520 board feet of honeylocust, and then an additional 1,000 board feet of bur oak and shingle oak. Bids went from $8,900 to $16,700 for this lump sum sale.

TIMBER SALE THREE:
This consulting forester's first sale was from Madison county in mid- July and encompassed 49.3 acres with 680 trees. The volume for the sale was 165.5 MBF (Doyle) and was driven by high-quality trees. Bids were received between $60,150 and $79,275.

The second sale was on 104 acres (62 of which were premium acres) in Perry county in March. The volume for the lump sum sale was 670 MBF (Doyle). Bids for the marketable timber products, including pulpwood, were from $328,746 to $382,116. This forester noted that mitigating circumstances caused the owner to sell it all, and that one buyer attempted to cut the forester "out of the loop."

TIMBER SALE FOUR:
At this consulting forester's sale, there was a wide variety of tree species. Most of the sale was made up of white oak and scarlet oak species, with volumes of 73.46 MBF and 76.42 MBF, respectively.

There were 124 black oak trees on the property as well. The rest of the mix was (in descending volume order): hickory, northern red oak, shumard oak, post oak, sweetgum, chinkapin oak, ash and sugar maple.

For free information on having a timber sale and contacting a consulting forester, call 877.564.7483 or www.callb4ucut.com